Inside Contactless Outlines Plans

Inside Contactless has outlined a plan for bringing contactless payment capabilities to phones without contactless chips.

The French chip maker said it is helping develop technology that goes a step beyond the stickers that can be affixed to phones today; these stickers deliver payments capabilities but do not provide the same benefits as integrated hardware, such as the ability to switch the contactless chip on and off. New technology using data cards and Bluetooth would provide these missing capabilities — similar to what an integrated chip could do, but without requiring the cooperation of device manufacturers.

"For certain classes of phones, such a solution makes sense," Charles Walton, an executive vice president with Inside Contactless, said in an interview Wednesday. "A bank can issue a microSD card," a memory card format that works with many phones, "much as they issue a card today."

Inside Contactless is working with several developers to create a payment-ready microSD card, a Bluetooth sticker and a smart phone case that can attach to a phone's data port, Walton said, though he would not name these partners. Several banks are close to signing contracts to test this technology, he said, though he would not name them either.

The advantage of these technologies is that they can "interact with" phones "a little more than a static sticker" can, he said. These products should be ready to test in the first half of 2010, he said.

Inside Contactless' technology is already a part of the GoTag payment stickers offered by Kohlberg Kravis Roberts & Co.'s First Data Corp., and other companies already offer products using technology similar to what Walton described in his road map. Tyfone Inc. of Portland, Ore., has a memory card that can be used to make contactless payments, and Rollcomm Worldwide Corp. of Budapest has developed a Bluetooth payment system.

Walton said his company was initially reluctant to use stickers and similar technology for contactless payments.

"We resisted then because we all frankly believed that the movement" in developing phones with integrated payment hardware "would happen faster, and it just didn't," he said.

Stickers and memory cards are "a way for banks to get out there next year to try a capability" that is still much farther away from being integrated with mobile phones, Walton said.